XXXXXX.XXX ADVERTISING AGREEMENT
This Advertising Agreement dated as of March __, 2000 (the "Agreement") is
entered into by and between Seagram Americas, a division of Xxxxxx X. Xxxxxxx &
Sons, Inc. ("SA"), located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, and
Xxxxxx.xxx, Inc., doing business as Xxxxxx.xxx. ("LC"), located at 0000 Xxxx
Xxxxxx Xxxx Xxxx, Xxxxxxx, XX 00000.
WHEREAS, LC owns and operates a commercial site on the World Wide Web located at
xxxxxx.xxx (the "Site") which is dedicated to facilitating the retail sale by
licensed alcohol beverage retailers of alcohol beverage products and related
products and is desirous of obtaining SA's participation as an advertiser on the
Site:
WHEREAS, LC holds no alcohol beverage wholesale or retail licenses or permits of
any kind and represents that it requires no such permits or licenses to enable
it to own and operate the Site in the manner described and contemplated by the
Agreement;
WHEREAS, SA is engaged in the manufacture, distribution and marketing of alcohol
beverage products and desires to advertise its alcohol beverage products and
related products on the Site;
WHEREAS, LC and SA each desire to use for advertising and promotional purposes
the other party's consumer database of names and mailing or email addresses in
the manner and to the degree hereinafter described;
THEREFORE, SA and LC agree as follows:
1. THE SITE. LC shall create, maintain and be responsible for all text and
visual images which shall appear on the Site, other than text and visual images
provided by SA. LC expressly represents and covenants that all advertising, text
and visual images related to distilled spirits which are placed on the Site
shall fully comply with (i) the Code of Good Practice of the Distilled Spirits
Council of the United States, a copy of which is attached to the Agreement as
Exhibit I and made a part hereof and (ii) all applicable laws, regulations and
ordinances, including in particular all applicable alcohol beverage laws,
regulations and ordinances. LC further represents and covenants that all wine
and malt beverage advertising, text and visual images which are placed on the
Site shall fully comply with the advertising codes of good practice of the Beer
Institute or Wine Institute, respectively.
2. PRODUCT PLACEMENT ON THE SITE. SA shall receive "Category Exclusive"
positions in the Rum and North American Whisky ("NAW") categories, all as
specified below, on the Site. As a "Category Exclusive" advertiser, SA's Rum
and NAW brands, a current list of which is appended hereto as Exhibit 2,
shall appear identified by their respective brand logos on the Home Page of the
Site under the heading: "Your Brands Assembled Here for
Easy Shopping" so that whenever a visitor clicks on a specific brand's logo,
he/she will automatically link to a specific Splash Page that will have been
created and submitted to LC by SA. One brand only from each category
identified in Exhibit 2 shall be represented as a storefront within any
thirty (30) day period. Should SA desire to rotate brands within the
category, SA shall be limited to one brand per month. SA shall create new
splash pages for each new brand at it cost, or reimburse LC its cost if LC is
required to create them. For purposes of the Agreement and the Site (i) the
Rum category shall be deemed to include all products designated as "Rum",
"Flavored Rum", "Spiced Rum", "Rum Liqueur", "Rum Specialty" and all similar
rum-based distilled spirits products, regardless of where produced and (ii)
the NAW category shall be deemed to include all products designated as
"Whiskey" or "Whisky", including "Flavored Whiskies," produced in either the
United States or Canada. For purposes of the Agreement, the Category
Exclusive shall receive key presence within the Storefront and Shop
Xxxxxx.xxx applications. No other brand in the same category will have a
continuous presence on the home page or usurp the lead position in the
applicable category in the shopping application. Nothing in the Agreement
prohibits other brands in the category from being featured on the Site.
3. ADVERTISING ON THE SITE. SA shall receive the advertising and product
exposure opportunities described below on the Site for each brand group in which
it has received Category Exclusive status. It is the responsibility of SA to
advise LC at least sixty (60) days prior to the commencement date of any
particular exposure opportunity that it desires to utilize.
a. Five (5) Brand Banners six times per year for a total of 30
b. One (1) Primary Feature(1) six times per year
c. One (1) Secondary Feature(2) six times per year
d. One (1) Xxxxxx.xxx Recommends Feature three times per year
e. One (1) Drink of the Week feature six times per year
f. One (1) Lead Article in LC's email newsletter six times per year
g. One (1) Guest Columnist article in LC's email newsletter six times per
year
h. Dissemination by LC to its entire email database of an email
communication to be developed by SA, subject to LC's reasonable
approval as to content, three times per year.
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(1) A "Primary Feature" for purposes of the Agreement is a major feature that
appears on the Shop Xxxxxx.xxx Home Page (size to be determined). An SA brand
will be entitled to six Primary Features annually. Each Primary Feature will
represent one brand or promotion and will appear for a period of thirty (30)
days. Primary Features may appear in June, August, October, November, December
and February.
(2) A "Secondary Feature" for purposes of the Agreement is an approximately 70 X
70 pixels feature that appears on the Shop Xxxxxx.xxx Home Page. An SA brand
will be entitled to six Secondary Features annually. Each Secondary Feature will
represent one brand or promotion and will appear for a period of thirty (30)
days. Secondary Features may appear in May, July, September, December, January
and March.
4. THE EFFECTIVE DATE. The Effective Date of the Agreement is May 1, 2000.
5. TERM AND TARGET NUMBERS. The Term of the Agreement shall be one year from
the Effective Date, provided that SA in its sole discretion may terminate the
Agreement effective on the ninth month anniversary of the Effective Date in
the event that the number of Unique Visitors, as hereinafter defined,
visiting the Site during the first nine months of the Term does not total at
least one million (1,000,000) (the "Initial Target Number"). For purposes of
the Agreement, the term Unique Visitors shall be defined by industry
standards (Web Matrix Standards). Alternatively, if the Initial Target Number
is not met during the first nine months after the Effective Date, SA in its
sole discretion may upon written notice to LC continue the Agreement but
postpone payment of the final payment of the Annual Fee, as hereinafter
defined, until the date thirty (30) days following its receipt of mutually
satisfactory evidence that the Initial Target Number has been achieved.
Furthermore, SA and LC agree that the Twelve Month Target Number for the
first twelve months of the Term is 4.4 million (4,400,000) Unique Visitors.
If the Twelve Month Target Number is not achieved by the twelve (12) month
anniversary of the Effective Date, SA in its sole discretion may terminate
the Agreement and, if the final payment of the Annual Fee has not yet become
payable in accordance with this section, SA's obligation to pay such final
payment of the Annual Fee shall be extinguished or, alternatively, in SA's
discretion, it may by written notice to LC extend the Term until the Twelve
Month Target Number is reached. In the event of such an extension SA shall
receive advertising rights on the Site during all months past the twelve
month anniversary of the Effective Date in accordance with Section 3 of the
Agreement on a pro-rata basis.
6. ANNUAL FEE. In consideration of the advertising rights being provided to it
under the Agreement, SA agrees to pay LC an Annual Fee of Three Hundred Thousand
Dollars ($300,000) in two equal installments as follows: (i) the sum of One
Hundred and Fifty Thousand Dollars ($150,000) shall be payable within fifteen
(15) days of the Effective Date and (ii) the sum of One Hundred and Fifty
Thousand Dollars ($150,000) shall be payable upon meeting of the Initial Target
Number. The obligation to pay the second installment may be postponed and/or
eliminated in accordance with the provisions of Section 5 of the Agreement.
7. ADDITIONAL TERMS. The parties agree to negotiate in good faith during the
twelfth month of the Term concerning the possible extension or renewal of their
relationship.
8. REPRESENTATION AND WARRANTIES. LC represents and warrants that it owns or
controls all right, title and interest to the Site and that it has authority to
enter into the Agreement and to fully perform all of its obligations hereunder.
LC further represents and warrants that its operation of the Site complies with
all applicable Federal, State and Local laws and regulations and that it will
adhere to all applicable Federal, State and Local laws and obligations in the
performance of its obligations under the Agreement.
9. TRADEMARK OWNERSHIP AND LICENSE. LC and SA shall retain all right, title and
interest in and to their respective trademarks, service marks and trade names
worldwide.
LC acknowledges that the trademarks, trade names, logos, copyrights and all
other literary, artistic, proprietary rights and all other information provided
by SA pursuant to the Agreement are the sole and exclusive property of SA and LC
shall acquire no rights whatsoever therein by reason of the Agreement.
10. USE OF SA CONSUMER DATABASE. LC shall be entitled up to four (4) times
during the Term to access in the manner described hereinbelow SA's consumer
database for the purpose of sending a written communication to consumers. The
cumulative total of addresses to be sent LC's mailings shall not exceed one
million (1,000,000). With respect to each such mailing, LC shall coordinate with
SA which will have the mailing done through a lettershop of its choice at a
price to be billed directly from the lettershop to LC and to be paid directly by
LC to the lettershop. With respect to each such mailing SA shall have the right
of approval over all content of the mailing, which approval shall not be
unreasonably withheld. It is understood and agreed that references in the
mailings to any brands deemed by SA to be competitive with its brands shall be
minor in the context of each mailing as a whole. Recipients for each mailing
shall be selected by LC in coordination with SA in that SA shall enable LC to
make queries of the database by geocode to enable LC to select batches of names
in cities or markets of its choice.
11. INCLUSION OF LC MATERIAL IN SA MAILING. LC shall be entitled to include one
LC insert in one of SA's consumer mailings to SA's Crown Royal Canadian Whisky
consumer database during the Term. LC's insert shall be created and printed at
LC's sole expense, but its content shall be subject to SA's approval, which
shall not be unreasonably withheld.
12. WEB SITE LINKAGE. During the initial twelve (12) months of the Term, or
longer if SA in its sole discretion so determines, SA shall provide website
linkage from at least one of its brand websites to the Site. The first SA
brand website to be linked shall be the CAPTAIN XXXXXX website and linkage
for such brand shall remain in place for a period of at least three (3)
months.
13. TERMINATION. Except as otherwise provided in Section 5 of the Agreement,
either party hereto may terminate the Agreement in the event that the other
party materially breaches the Agreement and such breach remains uncured for
thirty (30) days, or if either party is the subject of a bankruptcy filing which
is not dismissed within sixty (60) days, and/or if the Site is removed from the
World Wide Web and/or ceases operation for a period of at least two weeks. Upon
termination of the Agreement, the parties shall have no further obligation
between them, except (i) obligations with respect to confidentiality in
accordance with Section 8, which shall survive and (ii) in the event that the
Agreement is terminated through no fault of SA, SA shall be entitled to a refund
on a pro-rata basis of any portion of the Annual Fee it has paid hereunder.
14. CONFIDENTIALITY. The parties expressly acknowledge that all information
relating to both the existence of and the terms and conditions of the Agreement
and all information relating to the mailings referred to in Sections 6 and 7
shall be deemed confidential
information and shall be maintained in confidence by the party to whom such
information is given. Neither party shall disclose any aspect of such
confidential information without the prior consent of the other party, which
consent shall not be unreasonably withheld. These confidentiality obligations of
the parties shall survive expiration or termination of the Agreement.
15. INDEMNITY. Each party shall indemnify the other party from third party
claims arising from the breach of any warranty, representation or covenant in
the Agreement. Each party disclaims all implied warranties.
16. ASSIGNMENT. The Agreement is not assignable by either party without the
prior written consent of the other party.
17. NOT A JOINT VENTURE. The parties hereto are neither partners nor joint
venturers and neither party shall have the power or authority to bind or
obligate the other in any way.
18. ENTIRE AGREEMENT. The Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and no promise,
representation, warranty or covenant, whether written or oral, not included
in the Agreement has been made or should be relied on by either party. The
Agreement may not be modified except in writing and which is signed by both
parties.
AGREED TO AND ACCEPTED BY:
Xxxxxx.xxx, Inc. Seagram Americas, a division of
Xxxxxx X. Xxxxxxx & Sons, Inc.
By: /s/ Xxxx X Xxxxxxxx By: /s/ Xxxxxxx Xxxx
----------------------- -------------------------
Name: XXXX X. XXXXXXXX Name: XXXXXXX XXXX
---------------------- ------------------------
Title: Chairman Title: Vice President-Marketing Communications
--------------------- ---------------------------------------
4/24/00
EXHIBIT 1
CODE
OF GOOD
PRACTICE
FOR
DISTILLED SPIRITS
ADVERTISING
AND MARKETING
DISTILLED
SPIRITS
COUNCIL
OF THE
UNITED 1998
STATES =========================
DISTILLED SPIRITS COUNCIL
0000 XXX XXXXXX, X.X. XX XXX XXXXXX XXXXXX, INC.
XXXXX 000
XXXXXXXXXX, X.X. 00000
202/628-3544
xxxx://xxx.xxxxxx.xxxxxx.xxx
PREAMBLE
The Distilled Spirits Council of the United States, Inc. (DISCUS) is
the national trade association representing producers and marketers of
distilled spirits sold in the United States. The members of DISCUS adopt this
Code of Good Practice as guidelines concerning the placement and content of
advertising and marketing materials. These guidelines have two overriding
principles: (1) to ensure responsible, tasteful, and dignified advertising
and marketing of distilled spirits to adult consumers who choose to drink and
(2) to avoid targeting advertising and marketing of distilled spirits to
individuals below the legal purchase age.
The consumption of beverage alcohol products has played an accepted and
important role in the cultural and social traditions of both ancient and modern
society. DISCUS members take special pride in their products and their
commitment to promoting responsible consumption by those adults who choose to
drink. Nevertheless, it is the obligation of each consumer who chooses to drink
to enjoy beverage alcohol products in a responsible manner.
The distilled spirits industry acknowledges the problems inherent in
abusive consumption of beverage alcohol, and DISCUS members remain committed to
combatting alcohol abuse. To that end, the industry has joined with government
and civic groups in efforts to encourage responsible use of beverage alcohol
products. DISCUS also actively supports informational, educational, research,
and treatment initiatives in an effort to better understand, prevent, and combat
abuse of its products.
The producers and marketers of distilled spirits encourage
responsible decision-making regarding drinking of beverage alcohol by adults,
and discourage abusive consumption of their products. The distilled spirits
industry urges that adults who choose to drink, do so responsibly. Towards
this end, DISCUS members pledge voluntarily to conduct their advertsing and
marketing practices in the United States in accordance with the provisions of
this Code. The provisions of the Code apply to every type of print and
electronic media, including the Internet and any other on-line communications,
used to advertise or market distilled spirits.
DISCUS members recognize that it is not possible to cover every
eventuality and, therefore, agree to observe the spirit as well as the letter of
this Code. Questions about the interpretation of the Code, member companies'
compliance with the Code, and the application of its provisions are directed to
the Code Review Board of DISCUS.
2
1. Distilled spirits should not be advertised or marketed in any manner
directed or primarily intended to appeal to persons below the legal
purchase age.
2. Distilled spirits advertising and marketing should not be placed in any
communication intended to appeal primarily to individuals below the
legal purchase age.
3. Distilled spirits should not be advertised on college and university
campuses or in college and university newspapers.
4. Marketing activities for distilled spirits should not be conducted on
college and university campuses except in licensed retail
establishments located on such campuses.
5. Distilled spirits advertising and marketing should not be specifically
aimed at events where most of the audience is reasonably expected to be
below the legal purchase age. Fixed distilled spirits advertising and
marketing materials at facilities used primarily for adult-oriented
events fall outside this guideline.
6. Distilled spirits advertising should not be placed on any outdoor
stationary location within five hundred (500) feet of an established
place of worship or an elementary or secondary school except on a
licensed premise.
3
UNDERAGE PERSONS
1. Distilled spirits advertising and marketing materials are intended for
adults of legal purchase age who choose to drink.
2. The content of distilled spirits advertising and marketing materials
should not be intended to appeal primarily to individuals below the
legal purchase age.
3. Distilled spirits advertising and marketing materials should not depict
a child or portray objects, images, or cartoon figures that are popular
predominantly with children.
4. Distilled spirits advertising and marketing materials should not
contain the name of or depict Santa Claus or any religious figure.
5. Distilled spirits should not be advertised or marketed on the comic
pages of newspapers, magazines, or other publications.
6. Distilled spirits should not be advertised or promoted by any person
who is below the legal purchase age or who is made to appear, through
clothing or otherwise, to be below the legal purchase age.
4
7. Distilled spirits web sites should contain a reminder of the legal
purchase age on such web pages as the home page, access sites for the
purchase of distilled spirits or brand-logoed consumer merchandise,
and access sites depicting consumption of beverage alcohol, for
example, a "virtual bar".
8. Distillers recognize the crucial role parents play in educating their
children about the legal and responsible consumption of beverage
alcohol. To enable parents who choose to prevent their children from
accessing Internet web sites without their supervision, DISCUS will
provide those parents and the manufacturers of parental control
software upon request the web site address of each member company so
that the parent or manufacturer can use this information.
SOCIAL RESPONSIBILITY
9. Distilled spirits advertising and marketing materials should portray
distilled spirits and drinkers in a responsible manner. These materials
should not show a distilled spirits product being consumed abusively or
irresponsibly.
10. On-premise promotions sponsored by distillers should encourage
responsible consumption by those adults who choose to drink and
discourage activities that reward excessive/abusive consumption.
11. Distilled spirits advertising and marketing materials should not
promote the intoxicating effects of beverage alcohol consumption.
5
12. Distilled spirits advertising and marketing materials should not
contain any curative or therapeutic claim except as permitted by law.
13. Distilled spirits advertising and marketing materials should contain no
claims or representations that individuals can obtain social,
professional, educational, or athletic success or status as a result of
beverage alcohol consumption.
14. Distilled spirits should not be advertised or marketed in any manner
associated with abusive or violent relationships or situations.
15. Distilled spirits advertising and marketing materials should not imply
illegal activity of any kind.
16. No distilled spirits advertising or marketing materials should portray
distilled spirits being consumed by a person who is engaged in, or is
immediately about to engage in, any activity that requires a high
degree of alertness or physical coordination.
17. No distilled spirits advertising or marketing activity should be
associated with anti-social or dangerous behavior.
18. Distilled spirits may be portrayed to be part of responsible personal
and social experiences and activities, such as the depiction of persons
in a social or romantic setting, persons who appear to be attractive or
affluent, and persons who appear to be relaxing or in an enjoyable
setting.
5
DRUNK DRIVING
19. Driving while intoxicated is against the law. Distilled spirits
advertising and marketing materials should not portray, encourage, or
condone drunk driving.
ALCOHOL CONTENT
20. Distilled spirits advertising and marketing materials should not refer
to alcohol content except in a straightforward and factual manner.
GOOD TASTE
21. No distilled spirits advertising or marketing materials should contain
advertising copy or an illustration unless it is dignified, modest, and
in good taste.
22. No distilled spirits advertising or marketing materials should claim or
depict sexual prowess as a result of beverage alcohol consumption.
23. Distilled spirits advertising and marketing materials should not
degrade the image, form, or status of women, men, or of any ethnic,
minority, sexually-oriented, religious, or other group.
24. Distilled spirits advertising and marketing materials should not employ
religion or religious themes, nor should distilled spirits be
advertised in publications devoted primarily to religious topics.
7
There shall be established and maintained a Code Review Board, which
shall meet when necessary to consider complaints lodged by DISCUS members or
other interested parties.
The Code Review Board shall be comprised of no less than five (5)
members in good standing of the Board of Directors of DISCUS. Each member shall
be elected by a majority vote of the Board of Directors.
Findings of the majority of the members of the Code Review Board shall
be communicated promptly to the responsible advertiser and in appropriate
circumstances to all members of the Board of Directors of DISCUS.
8
A FACT ABOUT ALCOHOL CONTENT: [GRAPHIC]
EXHIBIT 2
RUM BRANDS AND NORTH AMERICAN WHISKEY BRANDS
RUM BRANDS
Captain Xxxxxx Original Spiced Rum
Captain Xxxxxx'x Parrot Bay
Captain Xxxxxx Silver Spiced Rum
Captain Xxxxxx Private Stock
Xxxxx'x Original Dark Jamaican Rum
Xxxxx'x Platinum White Rum
NORTH AMERICAN WHISKY BRANDS
Bulleit Bourbon Whiskey
Crown Royal Canadian Whisky
Crown Royal Special Reserve Whisky
Canadian Hunter Canadian Whisky
Four Roses Blended Whiskey
Mount Royal Light
Seagram's 7 Crown American Blended Whiskey
Seagram's VO Blended Canadian Whisky
Seagram's VO Gold Blended Canadian Whisky
